STRATEGY IMPLEMENTATION – EXTERNAL ENVIRONMENT ALIGNMENT Valentina Ivančić Faculty of Economics Rijeka Ivana Filipovića 4 51000 Rijeka Phone: ++ 38551/355131; Fax: ++ 38551/355131 E-mail: vivancic@efri.hr Ivan Mencer Faculty of Economics Rijeka Ivana Filipovića 4 51000 Rijeka Phone: ++ 38551/355124; Fax: ++ 38551/355124 E-mail: ivan.mencer@ri.t-com.hr Lara Jelenc Faculty of Economics Rijeka Ivana Filipovića 4 51000 Rijeka Phone: ++ 38551/355131; Fax: ++ 38551/355131 E-mail: ljelenc@efri.hr Želimir Dulčić Faculty of Economics Split Cvite Fiskovića 5 21000 Split Phone: ++ 38521/430614; Fax: ++ 38521/430614 E-mail: zelimir.dulcic@efst.hr How to cite: Ivančić, V., Mencer, I., Jelenc, L., Dulčić, Ž. (2017): Strategy implementation – external environment alignment, Journal of contemporary Management Issues, vol. 22, Special issue, pp. 51-67. Key words: strategy implementation process, perceived context uncertainty, enterprise proactiveness, Croatian large enterprises. JEL codes: L19, L26, M21, D78, O44. ABSTRACT For any business to grow and prosper, managers must be able to anticipate, recognise and deal with change in the internal and external environment. This paper examines the relationship between the external environment and strategy implementation process taking into account two perspectives of analysis. The first one defines the impact of environmental characteristics on the implementation process. Respondents were asked to evaluate the level of environment uncertainty in every day business through the the level of change complexity and turbulence. The second one defines the enterprise response and proactiveness in external data collecting, processing and opportunities building. The paper is based on an empirical research conducted in large Croatian enterprises. The sample includes 78 enterprises and includes respondents from different hierarchical levels and functions. Enterprises do not associate the lack of implementation success to the context uncertainty. Respondents, regardless of their position within the organization, emphasize they have a lack of competencies managing rapidly evolving situations. Enterprises, with a higher level of proactiveness in searching context characteristics, demonstrate a greater level of preparation in opportunities exploitation. Empirical results suggest that private enterprises mainly focused on international market perceive a higher level of context uncertainty. 1. INTRODUCTION Strategy implementation has recently started to be a hot research topic again. Since managers spend significant resources on consulting and training hoping to create brilliant strategies very often those brilliant strategies do not translate into brilliant performance (Verweire, 2014). It’s no longer a secret that most companies struggle with strategy execution. For example McKinsey research tells that 70 percent of change efforts fall short of desired results (Huy, 2011). Studies made by Noble (1999), Kaplan & Norton (2005) and Speculand (2009) suggest that more than 90 percent of well formulated strategies fail to be fully implemented causing a waste of resources and decreasing performance. This paper seeks to establish why such a high percentage of strategies does not result in high performance and how the external environment affects and hinder the implementation process (Dandira, 2011). Exploring the reasons of implementation inefficiency and ineffectiveness means identify the gap between what is planned to do and what is done during the implementation stage. This allows to understand better what can be done in line to improve the implementation process to fit better with environment changes. Environmental influences include positive and negative factors that managers have to take into account during decisions making. Understanding the external context can be facilitated by considering issues arising from legal, technological, competitive, market, cultural, social and economic environments. Understanding the internal context can be facilitated by considering issues related to values, culture, structure, knowledge and leadership within the enterprise (EN ISO 9001:2015). In a competitive marketplace, enterprises cannot affect context conditions, but can develop specific competences that enable managers to identify and exploit market opportunities better and/ or faster than competitors. For this reason, managers need constantly to collect, process, and address environmental information. Environment changes increase environment uncertainty, which in turn increase the level of riskiness during the decisional process. To reduce this risk, enterprises invest significant resources exploring the environment before setting strategic plans, as well as during the implementation process in line to modify what is incongruent with the constantly changing market conditions. In order to discuss about the relationship between the external context and the implementation process it is necessary to considerate: 1) the characteristics of external environment: defined through different levels of environment uncertainty and 2) the enterprise ability and promptness to understand and interpret environment influences: defined through the frequency of scanning, the applied scanning techniques and the accuracy in interpreting collected informations. In different studies authors strive to identify and group problems that affect the implementation and are connected to external influences. Below we propose some of them:  Alexander (1985), Al Ghamdi (1998), Taslak (2004), Wheelen & Hunger (2010), Kalali et al. (2011) point out the impossibility of an adequate identification and evaluation of external environment influences;  Al Ghamdi (1998) and Taslak (2004) underline that, very often, competitors’ activities distract attention from the implementation process, redirect resources and change the priority list in solving problems;  O'Regan & Ghobadian (2007) mention the instability of macro environment which increases risks of specific situation such as expanding business on new markets, the development of new products or the investments on financial market. The impact of external context on strategy implementation is, in this paper, analyzed combining two approaches. The first one, assesses the environmental uncertainty measuring the level of context turbulence and complexity. Context characteristics represent less or more stable framework in which strategic plans are implemented. However, some enterprises are more active and agile searching opportunities in the external environment (Miles & Snow, 1978) and that’s why we propose an additional approach. Evaluating enterprise proactiveness in searching context opportunities helps to understand why enterprises operating in the same industrial sector, under the same context conditions, have different levels of success. The evaluation of external context and the company proactiveness in searching context opportunities give a wider picture on the relationship between external context and strategy implementation process. Combining these two approaches stems the gap between what enterprises might do and what they currently do to achieve better performance in a given context. 2. THE IMPORTANCE OF EXTERNAL ENVIRONMENT INFLUENCES DURING THE IMPLEMENTATION PROCESS Strategy implementation is a very complex process because it depends on lot of factors that directly or indirectly influence its course. In order to improve the implementation efficiency and effectiveness it is necessary to find a balance managing these influences from inside and outside the enterprise. Almost every enterprise has a strategy, but not every strategy is a good strategy what means strategic plans, per se, are not enough to achieve desired results. Although it is clear that combining a good strategy formulation with a good implementation gives better performances (Bonoma 1984; Andrews 1987; Cespedes 1991), some authors such as Cumming & Wilson (2003), Kaplan & Norton (2005), Hrebiniak (2006) point out that it is better to have poorly defined strategy, which is well implemented, than very good strategy that is only partially implemented. The implementation stage seems to be the most important phase of the strategic management process because enterprise success, firstly depend on what enterprise is able to do in practice (Martin, 2010). Hrebiniak (2006) thinks that an inadequate strategy can hinder the implementation process, but on the other hand, a good implementation can overcome the lack of a poor strategy. Studying the relationship between the external context and strategy implementation process we propose three variables that must be examined: (1) the level of perceived context uncertainty, (2) the enterprise approach in searching and managing external influences, (3) performances during the implementation process. Studying the relationship between the mentioned variables will allow to explain how enterprises can improve the damping effect of environmental influences on strategy implementation and how to raise the level of proactiveness searching opportunities in the external context. Based on the three variables we develop a research model with three hypotheses as follows: 1) The relation between context uncertainty and the enterprise approach in searching and managing external influences Strategic context refers to the set of circumstances under which both the strategy content and organizational processes are determined (Van der Maas, 2008). The strategy concept has developed as an important aspect of management due to the dynamics and complexity of the world as well as an increasingly turbulent business environment (Kibicho, 2015). Exploring environmental characteristics, enterprises define the extent to which external context modify the transformation of strategic plans into concrete actions. Executing a strategy, no matter how brilliant it is, requires a planned approach and a constant environment monitoring (Davenport, 2007). Identify and monitoring environment context characteristics means determineing the level of context uncertainty. Generally, over the short term enterprises have little control over external influences (Obaga, 2016). Environment is a complex mechanism that change and evolve constantly. Modern business environment has become very competitive, making necessary to practice different context monitoring techniques (Njagi & Combo, 2014) in order to keep under control environmental influences. Environmental uncertainty is viewed as a function of the level of increase in environmental dynamism and complexity (Johnson & Scholes 1999). More dynamic and complex environmental conditions are, greater is the intensity of uncertainty in the environment. A dynamic environment is typified by change in environmental variables constituting the uncertainty dimensions (such as technology, customer needs and tastes, demand and supply conditions, and competition). Environmental complexity, on the other hand, is summed up by the amount and diversity of variables influencing the uncertainty dimensions in the environment. Although context uncertainty affects the implementation process and potentially reduce its success (Okumus, 2003; Van der Maas, 2008), study the perceived context uncertainty is not enough to explain why different enterprises in the same industry implement their strategies successfully than others (Pettigrew & Whipp, 1991). Jabnoun (n.d.) finds that strategic orientation is closely linked to environmental uncertainty. The level of uncertainty may be objective and measurable or subjective and perceived. But, the important issue is how enterprises behave in specific environmental conditions. Environment uncertainty increases information processing within enterprises because managers must identify opportunities, detect and interpret problems areas, and implement strategic or structural adaptations (Tushman, 1986). Daft & Weick (1984) hypothesize that differences in perceptions of environmental analyzability are due to characteristics of the environment combined with management's previous interpretation experience. Choo's (2001) empirical research suggests that managers who experience higher levels of perceived environmental uncertainty tend to do a larger amount of environmental scanning. Garg, Walters & Priem (2014) argue that high-performing CEOs vary their relative scanning emphases on different domains according to the level of dynamism they perceive in their external environments. According to these statements we develop two hypotheses: H1. The level of perceived context uncertainty reduces the performances during the implementation process. H2. The level of perceived context uncertainty affects the enterprise approach searching and managing external influences during strategy implementation. 2) The relation between enterprise approach searching and managing external influences and the performances during the implementation process. Environmental factors are infinite, hence, organization should be agile and vigil to accept and adjust itself to the environmental changes. The practice of scanning by itself is insufficient to assure great performances, for what scanning might be aligned with strategy, and scanning information must be effectively utilized during the strategic management process (Morrison 2000). The strategic management literature proposes numerous approaches to define and analyze the strategic management process (Johnson et al., 2014). For example, Whittington (2001) proposed four approaches: (1) classical approach, (2) evolutive approach, (3) processual approach and (4) systemic approach. Classical and systemic approaches represent opposing options. The classical approach implies that strategic management process is a formal procedure divided into several phases. The central organ of the enterprise is the management board. The systemic approach, on the other hand, stems from the idea “play the local rules” (Whittington, 2001). According to the systemic approach strategies are developed in complex networks and are culturally defined. The objectives and practices of strategy strongly depend on the particular social systems in which strategy takes place events (De Wit & Meyer 2010). While the evolutionary and processual approaches consider the process of strategy as emergent, the classical and systemic approaches perceive strategy as deliberate and context adaptable. Different strategy schools suit different situations and environments. The classical approach of strategy development, with its inward focus and reliance on historical data, do not encourage decision makers to anticipate environmental changes and assess their impact on the enterprise. Strategy implementation takes place on different hierarchical levels according to the pre-set parameters without questioning suitability and adequacy. The classical approach appears to be most appropriate for stable and mature industries and the Michael Porter’s ‘Five Forces’ model (Porter, 2008) may be appropriate to analyse the industry attractiveness for making profit. Contrary to the Classicists, who begin by formulating strategy and then implementing it, Processualists discover strategy through action. In the processual approach, strategy emerges from everyday operations and from the market processes. Strategies are crafted in a continuous middle-up-down incremental process between the enterprise and its environment. The evolutionary approach is based on the belief that the economic environment is continuously changing and the role of the strategy is to respond quickly and efficiently to the environment (Analoui & Karami, 2002). On the other hand, Miles and Snow (1978) propose a different typology of enterprises strategic behavior towards the environment. They propose four strategy typologies: prospector, defender, analyzer and reactors. Hambrick (1983), Miller (1986), Snow and Hrebiniak (1980), Andrews (2008) point out that each strategy types perform differently under different environmental conditions. According to Miles and Snow (1978) prospectors and reactors represents diametrically opposed approaches. While prospectors actively and constantly seek their opportunities in the environment, reactors do not have a clear strategy and their operations are not based on self-initiative, but act as a result of competition changes. In simple and stable environments, where customer needs, products and services offered to satisfy them are well established, and where technological and other environmental factors are changing slowly, defending a firm’s position (through the defender strategy) can be a viable and successful strategy. The Miles and Snow typology proposes that defenders focus on solving engineering problems and place a high priority on improvements in efficiency and are led by a dominant coalition composed of people with expertise in finance and production. Defenders thrive in stable environments. They isolate and protect relatively stable markets and grow through market penetration (Slater & Narver, 1993). In highly dynamic and complex environments, defending a position becomes difficult. Success depends more and more on proactive skills responding to and keeping a dynamic alignment with the changing environment, through, for instance, organizational innovation, which is found to be positively correlated with environmental uncertainty (Russell & Russell, 1992). Russell and Russell (1992) explain that high levels of uncertainty generate more innovations through opportunity seeking and adaptation to change. Chen and Hambrick (1995) define proactiveness as an important dimension of entrepreneurial orientation. The third hypothesis assumes that enterprises with a higher level of proactiveness in searching the external context achieve higher levels of implementation success. As Miles and Snow indicated, firms that match their situation to the environment can improve their performance, while those that do not court failure. The relationship between the firm and its environment, in the strategy-making context, has two major dimensions. First, the firm’s basic mission or scope should match its environment. Second, it should aim at having a competitive edge with other firms that are also trying to get that match (Rumelt 1996). Strategies are formulated to adapt to, respond to, or shape the environment (Johnson & Scholes, 1999; Mintzberg, 1994). H3. The performances during the implementation process are positive correlated to the enterprise approach to the external context. According to the statements and hypothesis developed above we propose the following research model: Figure 1. The research model and the relationships between variables H2. The level of perceived context uncertainty (V1) The enterprise approach in searching and managing external influences (V2) H1. H3. Performances during the implementation process (V3) Source: Authors 3. THE RESEARCH INSTRUMENT AND SAMPLE DESIGN 3.1. The research instrument For the empirical research a questionnaire was developed. The questionnaire is divided into three parts according to the variables specified in the research model. The questionnaire is in original Croatian language. The first part explores the level of perceived context uncertainty which is evaluated by researching the level of turbulence and complexity in the general and task environment for the last five years. The measuring scale is taken from authors Tan & Litschert (1994). Questions are presented as a Likert's scale from 1 to 5, where number 1 indicates the described situation never occurs and number 5 indicates the situation always occurs in the enterprise. Enterprises with a higher score on this scale are those which perceive a higher level of context uncertainty during the implementation process. The second part evaluates the enterprise approach to the external context by the four typologies proposed by Miles et al. Taken from a recent Andrews' work (2008). Questions are, also, presented as a five levels Likert's scale. It is supposed that enterprises with a higher score on this scale are more proactive in environment searching and opportunities exploitation. The third part consists in the examination of strategy implementation success. The measuring scale developed for this variable represents a part of a wider questionnaire developed in the Ivančić’ s (2015) doctoral dissertation. There are four key factors describing the implementation process: (1) resources, (2) people, (3) communication activities, (4) operational planning and control systems. Questions are developed as a Likert's scale from 1 to 5, as well as for the first and the second variables. A higher score on the scale shows the enterprise achieve better performances during the implementation stage in relation to what was planned. The Table1. summarizes variables, number of items and the Cronbach’s alpha coefficient for each variable. Table 1. The psychometric characteristics of empirical research Variables V1. The level of perceived context uncertainty V2. The enterprise approach to the external context V3. Performances during the implementation process Number of items Cronbach’s alpha coefficient 16 0,87 15 0,9 Resources: 0,89 Employee: 0,90 Communication: 0,87 Operative planning and control systems: 0,87 Cronbach's alpha coefficient for the whole construct: 0,95. Source: Empirical results Resources: 5 Employee: 5 Communication: 6 Operative planning and control systems: 8 3.2. Sampling design One of the main contributions of this study stems from the sample determination. Previous studies examined much more the top management attitudes, while lower hierarchical levels opinions are poorly examined (Grönroos 1995). Sundheim (2013) points out the importance of a continuous cooperation between strategists and executors. He explains that sucessfully strategy formulation and implementation involves experts from all hierarchical levels. Comparing different perspectives enables to set up more concrete and realistic conclusions what is the main prerequisite in proposing appropriate strategic and practical guidelines. For this reason, in each enterprise, we investigate the opinion of top, middle and low-level management, as well as the operative level. The study included large Croatian enterprises. The database was developed according to the list of enterprises registered at the Croatian Chamber of Economy in April 2014. The population includes 396 active large enterprises. Data about income and assets are downloaded from the Croatian Financial Agency website (FINA). With 208 questionnaires from 78 large enterprises, the response rate is 19.75%. The research was conducted in the first part of 2015. The first contact with enterprises has been established personally or through a telephone conversation. After the first conversation, the questionnaire was sent to e-mail or post, depending on the instruction of the contact person. The following two tables summarize the most important demographic characteristics of the sample. We checked the sample representativeness with the Kaiser-Meyer-Olkin (KMO) and Barlett test. The KMO test was above the acceptable level of 0.7 and the Barlett test is statistically significant. We made the analysis of frequency distribution, as well as an exploratory factor analysis to eliminate items with a low correlation in the considered set of variables. The questionnaire at the end of the paper include the original questionnaire, before the exploratory analysis. A significant change was made on the third construct that measure performances during the implementation process. In the questionnaire we start with 6 seleected variables that measure the implementation performances, including the alignement of resources, people, communication, monitoring systems, operative planning and time. After the exploratory analysis we proceed with the following four variables: resources, communication, people, operational plans and monitoring systems. Furthermore, it was necessary to check whether enterprises in the sample, according to their basic characteristics, differ in relation to those that did not respond to the questionnaire, non response bias. For this purpose, three basic features were selected and checked: (1) the number of employees, (2) the average ROA coefficient for the period 2008-2013, and (3) the distribution of enterprises according to the industry they belong to. For the first and second purpose we check the Pearson’s cofficient of correlation. Table 2. Pearson’s cofficient of correlation N. of employees (enterprises that respond to the questionnaire) N. of employees (enterprises that didn't respond to the questionnaire) Average of ROA 2008-2013 (enterprises that respond to the questionnaire) Average of ROA 2008-2013 (enterprises that didn't respond to the questionnaire) N Mean St.Dev. Pearson's coeff. 78 708 1306,702 t (78, 389) =5343, p>0,05 274 957 2352,96 74 2,465 8,627 274 1,0361 9,157 Source: Empirical research t (74, 314) =23103 p>0,05 The results show that the number of employees and the ROA score do not significantly differ between enterprises who respond to the survey questionnaire and those that did not. For the third analyzed feature, it is important to emphasize the number of enterpises per industry in relation to the total number of enterprises (in the population) and in relation to the total number of enterprises in observed industry. More than 20% of enterpises (responses) per industry in relation to the total number of enterpises in observed industry are achieved for the following sectors: (1) B- Mining and quarrying, (2) C- Manufacturing, (3) E- Water supply, sewerage, waste management and remediation activities, (4) H- Transporting and storage, (5) I- Accommodation and food service activities and (6) M- Professional, scientific and technical activities. The following table 3 illustrates the structure of the sample according to the Croatian industry classification (NKD from 2007). Table 3. The structure of the sample according to the industry Industry A- Agriculture, forestry and fishing B- Mining and quarrying N. and % of active enterprises 14 (3,54%) N. and % of collected questionnaires 3 (0,78%) 3 (3,85%) 1 (1,28%) Industry N. and % of active enterprises 144 (36,36%) 13 (3,28%) N. and % of collected questionnaires C- Manufactoring E- Water supply, sewerage, waste management and remediation activities F- Construction 30 (7,58%) G- Wholesale and retail trade, repair of 81 (20,45%) motor vehicles and motorcycles H- Transporting and storage 30 (7,58%) I- Accommodation and food service 18 (4,55%) activities J- Information and communication 12 (3,03%) M- Professional, scientific and technical 5 (1,26%) activities R- Art, entertainment and recreation 8 (2,02%) Tot. 396 Source: Empirical research 32 (41,03%) 3 (3,85%) 4 (5,13%) 10 (12,82%) 9 (11,54%) 13 (16,67%) 1 (1,28%) 1 (1,28%) 1 (1,28%) 78 (100%) Table 4 offers a clear view on the main demographic charactetistics of the sample. Table 4. Demographic characteristics of the sample Hierarchical level Top management Middle management Low level management Operative level Tot. N. & % The respond ents’ average age 45 Private 70 (33,7%) 44 Public 49 (23,6%) 41 Tot. 30 (14,4%) 208 (100%) 36 59 (28,4%) Ownership Market of placement N. & % 166 (80%) Domestic market 99 (47,5%) 42 (20%) Foreign market 109 (52,5%) 5-9 y. Tot. 208 (100%) 10-14 y. N. & % 208 (100%) Respondents’ experience in explored enterprise 0- 4 y. 15- 19 y. 20 and more y. No answer 41,5 Tot. Source: Empirical research N. & % 38 (18,3%) 48 (23,1%) 44 (21,2%) 28 (13,5%) 47 (22,6%) 3 (1,4%) 208 (100%) Moreover, we do not achieve questionnaires from all hierarchical levels in each enterprise. The structure of achieved questionnaires according hierarchical levels is presented in the following table 5. Table 5. The structure of involved hierarchical levels Involved hierarchical levels All four hierarchical levels Three hierarchical levels Two hierarchical levels One hierarchical levels N. of enterprise 5 59 10 4 Tot. Involved hierarchical levels N. of enterprise 78 Source: Empirical research 3.3. Data analysis and findings Research data were analyzed in SPSS. The correlation between specified variables was tested with the t-test, the ANOVA test and the regression analysis. The correlation between demographic variables and the level of context uncertainty on one hand, and the correlation between demographic variables and the enterprise approach to the external context on the other hand, is presented in Table 6. Table 6. The link between the demographic characteristics and the level of perceived context uncertainty Demographic variables Ownership: a) private b) public Market of placement: a) mainly on domestic market b) mainly on foreign market Type of industry: According to the classification NKD 2007 valid in the Republic of Croatia Strategy implementation phase: a) introduction b) growth c) maturity The level of perceived context uncertainty (V1) Turbulence F(1,199)=6,513; p<0,01; R2 adj.= 0,027 Complexity F(1,200) =4,835; p<0,05; R2 adj.= 0,019 Turbulence F(1,196) =5,319; p<0,05; R2 adj.= 0,021 Complexity F(1,197) =4,295; p<0,05; R2 adj.= 0,016 Turbulence F(10,191) =3,482; p<0,001; R2 adj.= 0,110 Complexity Statistically not significant. Turbulence F(2,198) =4,008; p<0,05; R2 adj.= 0,029 Complexity No significant. Post hoc test Not necessary Not necessary Turbulence (0,7560)GB (0,8171)IB (0,3608)IC (0,5164)GH (0,5775)IH ˙See table 3 Turbulence (0,4451) IG (0,723) IM (0,2356) GM I= introduction G= growth M= maturity Source: Empirical research The following table 7 offers a similar look of the demographic variables in comparison to enterprise approach to the external context Table 7. The link between the demographic characteristics and the enterprise approach to the external context Demographic variables The enterprise approach to the external context (V2) Post hoc test F(1,194) =10,672; p<0,001; R2 adj.= 0,047 Not necessary F(1,191) =7,441; p<0,005;R2 adj.= 0,032 Not necessary Ownership: a) private b) public Market of placement: a) mainly on domestic market b) mainly on foreign market Type of industry: According to the classification NKD 2007 valid in the Republic of Croatia F(10,186) =2,218; p<0,05, R2 adj.= 0,058 ˙See table 3 Strategy implementation phase: a) introduction b) growth c) maturity (0,8921)AA (0,6250)AG (0,6250)AH (0,8778)AJ (0,5548)CB (0,5405)CJ (0,6180)IB (0,6037)IJ F(2,192) =37,406; p<0,01 (0,6801)GI (-0,6248)IM I= introduction G= growth Source: Empirical research M= maturity Respondents’ years of work in the enterprise as an indicator of respondents’ level of knowledge of enterprise informationand accumulated experience, as well as the hierarchical position of respondents within the enteprise are not significant predictors for the level of perceived context uncertainty, as well as for the understanding the level of enterprise proactiveness in information searching and external opportunity seizeing. The first hypothesis (H1) assumes that enterprises operating in a context with a higher level of uncertainty have more obstacles implementing strategy what directly reduce the success of the implementation process. Figure 2. The relationship between the level of perceived context uncertainty and the success of the implementation process The level of perceived context uncertainty (V1) H1. Performances during the implementation process (V3) Source: Authors The correlation between V1 and V3 has been tested by the one way ANOVA test. The results show that the level of perceived context uncertainty is not statistically significantly correlated to the strategy implementation success (F (37,154)=1,305; p= 0,135), what means the first hypothesis has not been proven. However, it should be amphasized that the Accommodation and food service industry from Table 8 perceives the highest level of context uncertainty, both in term of turbulence and complexity. Table 8. The level of context turbulence and complexity in each industry Level of turbulence Industry A- Agriculture, forestry and fishing B- Mining and quarrying C- Manufactoring E- Water supply, sewerage, waste management and remediation activities F- Construction G- Wholesale and retail trade, repair of motor vehicles and motorcycles H- Transporting and storage I- Accomodation and food service activities J- Information and communication M- Professional, scientificand technical activities R- Art, entertainment and recreation Mean 3,4375 2,6094 3,0656 3,0694 3,0000 3,3654 2,8490 3,4265 3,1667 2,9167 3,1250 N 2 8 80 9 11 26 24 34 3 3 2 Std. Deviation ,44194 ,36862 ,54648 ,76575 ,50312 ,49614 ,41208 ,49631 ,47324 ,47324 ,53033 Level of complexity Std. Mean N Deviation 3,25 2,968 3,0406 3,1354 3,1991 2,6875 3,2257 3,25 2,9167 2,5 3,05 3 8 77 8 12 27 24 36 3 3 3 ,33070 ,52928 ,68027 ,70394 ,56523 ,62139 ,71189 ,62451 ,25000 ,47324 ,17678 Source: Empirical research The second hypothesis (H2) emphasized that, when faced with a higher level of context uncertainty, managers become more preoccupied about the strategy implementation process and business performances, for what they become more proactive in environment scanning and opportunity building. Figure 3. The relationship between the level of context uncertainty and enterprise's approach to the external context The level of perceived context uncertainty (V1) H2. Source: Authors The enterprise approach to the external context (V2) The correlation between V1 and V2 has been tested with the one way ANOVA test. The results show that the perceived context uncertainty is statistically significantly correlated to the enterprise approach in exploring the external context, (F(37,151) =1,42; p=0,05). The third hypothesis (H3) assumes that enterprises with a higher level of proactiveness in searching the external context assure higher levels of success during the implementation process. Figure 4. The relationship between the enterprise approach to the external context and the success of the implementation process The enterprise approach to the external context (V2) H3. Performances during the implementation process (V3) Source: Authors Results in this research confirm the Miles and Snow’s strategic typologies. The coefficient of correlation between V2 and V3 is F(37,154)=6,622; p=0,013, and the regression coefficient, is adj R2.=0,521. A more proactive approach to the external context ensure better performances during strategy implementation. This type of enterprises, are by Miles & Snow, defined as prospectors. Prospectors are able to achieve better results in strategy implementation, although the level of context uncertainty in which these enterprises operate is generally more pronounced. This is especially the case of those enterprises that belong to propulsive industries and their products and/or services are placed mainly on foreign markets. According to our findings, prospectors are more present in Accommodation and food activity (I), as well as, in Wholesale and retail trade (G). Enterprises do not associate the lack of implementation success to the context uncertainty. Respondents, regardless of their position within the organization, emphasize they have a lack of competencies managing rapidly evolving situations and that is why they face with a lot of unexpected problems during the implementation process. Enterprises, with a higher level of proactiveness in searching context characteristics, demonstrate a greater level of preparation in opportunities exploitation. Our findings confirm that the Republic of Croatia, as the Republic of Slovenia, has some specific context characteristics due the transitional process. Respondents, usually lament the slowness and inefficiency of the political and legal context which suffocates bureaucratic processes. This attitudes, in particularly comes from public enterprises, mostly, focused on domestic market placement. Furthermore, enterprises, especially at the beginning of the implementation process, lament that there is very difficult to set up a proper scanning system and to direct collected information trough the implementation process. Enterprises that are primarily oriented to foreign markets, perceived a higher level of context uncertainty, but at the same time, are stimulated to be more focused on the strategy – context alignment process. Sawyerr (1993) and May et al. (2000) indicate that the frequency of scanning depends on the environment characteristics. The results of our research, based on a sample of 78 large Croatian enterprises, are confirmed also by other researches during the last three decades. For example West (1988) examined the relationship of organizational strategy and environmental scanning to performance in the US food service industry. Results indicate that business success is not linked to the strategy itself, but is linked to the proactiveness and frequency of scanning the external context. Subramanian et al. (1993), prove that enterprise that use advanced systems to monitor external events showed higher growth and profitability than enterprises that did not have such systems. The research made by Chaimankong & Prasertsakul (2012) and by Obaga (2016) confirmed the connection between the enterprise approach to external context and the success during the implementation stage. The environment scanning allows to monitor the implementation process from inside and outside the enterprise (Cancellier et al., 2007). Moreover, enterprises in private ownership, mostly focused on international products/ services placement, match the prospectors’ characteristics. In this research, as in that made by Cancellier, et al. (2014) prospectors scan data from the competition as well as technological aspects more frequently than the other three typologies. They create change and do not react only to competitors’ activities. The strategy is focused on continuous development, emphasizing environmental circumstances, trends and events. Defenders, analyzers and reactors, on the other hand, are enterprises that are limited to an area in their organization and do not seek opportunities beyond their product or market domain. Defenders are conservative and focus on innovation activities on existing products (Pleshko, 2006), while analyzers and reactors focus on the penetration in existing markets. Consequently, whenever they are faced with a threat or an opportunity, they are going to choose renewal in a certain industry and/or market (Zubaedah et al. 2013). On the other hand, the level of change dynamism on the market can affect the implementation process, but only at the beginning of new strategy implementation, if the management board has not developed specific competences between key employees. 4. CONCLUSION Influences from the environment are one of the most mentioned obstacles managing the strategy implementation process. The most common approach defining the environmental impact on the implementation process foresees that determining the level of context uncertainty allows to explain why some enterprises are more successful than others. That’s why we suggest and explain why adopting the first approach is not enough and why managers have to reassess their involvement in information seeking and opportunities exploitation. Our research points out that there is a significant difference in the perception of environment uncertainty between private and public enterprises. The level of perceived uncertainty differs depending on the market where enterprises place their products or services. Those that sale on international markets perceive a higher level of uncertainty, but at the same time are more proactive and agile in harmonizing the needs of their business with the opportunities in the environment. Enterprises that belong to industrial sectors (G) and (I) perceived higher level of environment turbulence. It is important to note that the enterprise approach to external context inevitably affect the way strategic plans are developed and implemented. Managers that are more involved in environment exploring, regardless their hierarchical position, will recognize opportunities and necessary competences earlier than competitors. Top managers should endeavourer specific training programs in order to develop employee ability in reacting and managing complex and non-routine situations. This obbligates top managers to communicate more clearly and promptly strategic guidelines to lower hierarcical levels. For further researches in this field we suggest to explore the speed, and the adequacy of information processing to search deeper the enterpise proactiveness to external context and the strategy implementation alignment. Moreover, it could be useful to conduct interviews in order to identify aspects and practical manifestations of different external influences n strategy implementation process. This will allow to set up more specific guidelines to improve the implementation – environment alignement models. Literature a) Books 1. 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